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In a high-speed legislative sprint, Illinois lawmakers passed a $55.2 billion budget late Saturday night for the 2026 fiscal year, powered by more than $1 billion in new taxes and revenue strategies. The budget passed without Republican support, with Democrats defending the plan as a responsible response to economic uncertainty and potential federal funding disruptions.
The budget raises state spending by nearly 4%, including sweeping tax increases on sports betting, tobacco, vaping products, and out-of-state corporate profits. Lawmakers also voted to eliminate a major health insurance program for undocumented immigrants aged 42–64, saving the state $330 million.
Key Revenue Changes
- Sports betting taxes: 25 cents per wager for the first 20,000 wagers, 50 cents after that.
- Tobacco tax: Raised from 36% to 45%; new taxes added for vapes and nicotine pouches.
- Corporate tax reform: Profits moved offshore now face Illinois corporate income tax. Out-of-state and online sellers grossing $100,000+ in Illinois must collect state sales tax.
- Other tactics: $228M from a tax amnesty program and $171M redirected from the road fund.
Spending Priorities
- Education: $307M added for K–12 schools. Community college funding drops $24M, while state universities get just a 1% bump.
- Healthcare: Cuts controversial immigrant health program; maintains a $110M program for seniors. $40M allocated to community health centers.
- Emergency Fund: A $100M contingency fund created for unexpected federal funding shortfalls.
- Pensions: $75M set aside to address compliance concerns with Social Security’s safe harbor law.
- Public Workers: Direct service providers will receive an 80-cent hourly raise, though Republicans argue reduced hours cancel out the increase.
What Was Left Out
- Bears Stadium: No funds were allocated for the proposed new Chicago Bears stadium.
- Rainy Day Fund: Monthly deposits suspended, freeing $45M for general use.
- Transit Reform: A proposed $1.50 delivery fee and statewide EV charger tax failed to pass, but talks may resume later this year.
Political Fallout
Republicans slammed the budget process as opaque and rushed. “You gave yourselves a raise, raised taxes, and left the public out of the process,” said Rep. Amy Elik (R-Godfrey). Lawmakers’ base pay is set to increase to $98,304 under the new budget.
Democrats countered that the budget ensures fiscal stability amid unpredictable federal politics. “It’s not perfect, but it’s the budget we need right now,” said Rep. Lindsey LaPointe (D-Chicago).
Governor JB Pritzker has indicated he will sign the budget, marking the end of a contentious and compressed legislative session.
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